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Evening Reading: What Price Digital?

Steam's dramatic holiday sale prices may (as I asserted yesterday) provide Valve a significant bump in their customer base but what then? Should it succeed the expectations will have been set at bargain basement deals. In the unstable online economy of digital distribution that's anything but the norm. Along with the still young search for the "right" price as dictated by the market, digital distributors face pressure to keep prices at a point that won't completely cannibalize sales for traditional brick-and-mortar stores. The result puts the online price at pretty much the same number as it is in stores.

The whole issue of pricing poses one of -- if not the -- big roadblocks in the system. Over Christmas I was reminded of how out of whack it is in the TV world. To catch up on a single missed episode of a TV show costs $3 if you want to see it in HD. It's hard to see the value in that when it was originally broadcast for free, will most likely be shown again as a rerun, and if I set my DVR I can get it to watch whenever I want.

Games, though, pose a different value proposition. At a store my $50 or $60 bucks gets me a box, manual (though not much of one anymore), and a disk but, let's be honest, what's that really worth? The value is more perceived than real. When it comes down to it I'm mostly paying for the content and the rest just happens to be the delivery method.

Download is just another way of getting the game. That puts digital distribution as merely the latest frontline for the real battle of whether the $50-$60 game model holds the future for a growing video game business. Or for that matter, is it even sustainable?